The U.S. trade deficit blew up in December, once again hitting its highest monthly total since 2008, indicating President Donald Trump’s tariffs have been ineffective.

The trade deficit rose 18 percent in December to $59.8 billion, according to data released by the Commerce Department on Wednesday. The data also showed the trade deficit for goods in 2018 swelled to $891.3 billion, setting a record for the highest yearly total in history.  

A strong U.S. dollar, slow global economy and the Trump administration’s tariff policies contributed to the largest U.S. trade deficit for goods and services since October 2008.

The U.S imported $264.9 billion in goods and services in December, a 2.1 percent increase from a month earlier. The U.S exported $205.1 billion, a 1.9 percent decrease. Foreign markets are less inclined to buy American goods and services when the dollar is strong and their currency doesn’t buy as much, said Jay Bryson, acting chief economist for Wells Fargo Securities, LLC.

“Exports have been pretty weak in the last few months,” Bryson said.

In 2018, exports of goods peaked in June, with $145 billion. December had the lowest exports of goods since January, with $135.6 billion. The exports of services remained stagnant in 2018, with a median of $68.9 billion. December had $69.5 billion in exports of services.

Last October, the U.S. trade deficit for goods and services had also reached its highest monthly level since the end of the George W. Bush presidency during the Great Recession. In November, after five straight months of growth, the trade deficit narrowed to $50.3 billion.

The consensus among economists before Wednesday’s data release was that the U.S. trade deficit would expand, but many of them had underestimated the extent to which it would.

“The combination of weak exports and strong imports reflects the contrast with U.S. economic activity, which is reasonably solid, and global economic activity, which is flat out weak,” Thomas Simons, an economist for the investment bank Jefferies & Company, said in a statement.  

The tariffs imposed by President Trump on goods including steel and aluminum are having exactly the opposite of effect of what he intended them to have, which was to close the trade gap, said Ryan Sweet, director of real-time economics at Moody’s Analytics Inc.

“The Trump administration’s policies are going to widen the trade deficit,” Sweet said.

Hedging his bet, he added that only time will tell if Trump’s tariffs can reduce the deficit.

“Maybe it takes longer for that to happen,” he said.

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